Sproutnomics

2020: Flood Insurance Cover Foundation Damage?

Flood insurance cover foundation damage

More and more people are asking the same question, so you are not alone. It’s not a surprise that more people wonder what kind of insurance covers damage to their home foundation. With erratic weather being the norm rather than the exception these days, more states are going through floods that just never occurred in the past. It seems that in more areas than ever before, there is a high risk of flooding. Ironically, many plans of insurance, including home insurance policies, do not specifically cover flooding.

So the question is, will my flood insurance cover foundation damage?

Yes, flood insurance covers foundation damage. Whereas regular homeowner insurance doesn’t cover damage from floods at all, flood insurance does. Flood insurance will cover any damages done to your foundation caused by flooding, but if your house is full of water because of rising bodies of oceans, streams, rivers, or lakes, flood insurance will not cover it.

Generally, the reason why flood insurance excludes insurance standards is that there is a high toll of damage that flooding brings. Plus, many items that floodwater impacts are hard to salvage; most need to be replaced.

Areas require specialized insurance with frequent floods, which is aptly called flood insurance. Even if it may behoove you to buy specialized, extra coverage, you will thank yourself later after yet another flood ruins the carpet. Also, waiting before an actual flood occurs before you get yourself some honest-to-goodness flood insurance may not be a good idea. The reason is that many times, the approval you need to get flood insurance takes up to a month.

What Exactly Is Flood Insurance?

A type of insurance against a catastrophe, flood insurance is not the same as primary insurance hazard in a policy of homeowners insurance. Interior water damage is covered by standard homeowners insurance due to weather events such as a rainstorm or a tornado, or even a burst pipe. However, it does not generally cover damage or destruction caused by the waters of a flood. Property owners living in areas prone to these types of natural disasters usually need to get specific coverage.

Insurance for floods works just like other products of insurance. The property or home of the insured pays a yearly based premium on how much your property is at risk for a flood. If the property or your home contents are destroyed or damaged by floods caused by external occurrences such as storms, snow, rain, failed infrastructure, or collapsed infrastructure, you get cash for the required money amount to rebuild the structure or repair the damage only until the limit of the policy. Unlike standard procedures of homeowners, flooding insurance requires that policyholders purchase policies separately to cover the contents of a home or the dwelling-place itself.

Flood Insurance Coverage

Essentially, losses that stem from significant flooding is what flood insurance provides, including building and foundation protection. Depending on what is listed on the plan, it may or may not also cover:

  • Detached structures
  • Detached garages
  • Permanent fixtures such as paneling, cabinetry, and bookcases
  • HVAC systems including the furnace, air conditioners, and water heaters
  • Any permanent flooring
  • Plumbing systems
  • Electrical systems

Homes that go through a flood usually also go through foundation damage. This occurs as a result of soil runoff. Flood water pulls soils away from your home’s foundations, which exposes your home to settling, cracks, and other issues. This can lead to costly repairs when this happens.

Anyone with these types of damage will need to take the following immediate steps:

  1. As soon as you notice damages to the foundation, including water leaks, settling, and cracks, take action. Don’t ignore these issues at all.
  2. Talk to your insurance agent about any damages from the flood as soon as you can. The next step would be for them to do a property inspection.
  3. If you notice newly occurring runoffs, immediately make repairs to ensure your property is protected.

Your policy for flood insurance will help cover repair costs in most cases. Of course, repairing the foundation as soon as you can is recommended. This way, you can avoid any long term negative impact. If you wait until insurance finally completes all the paperwork and process of inspection, the damages may have developed into something much more extensive, not to mention costly.

Also, your provider will usually help you pay for all repairs. They are, however, not as likely to provide repair funding if they determine that the problem with your foundation is due to your being negligent. Your insurer can offer more specifics about your circumstances. Going through a flood and dealing with the resulting consequences on your foundation can be risky and expensive, with no coverage.

Does Flood Insurance Cover Foundation Damage? Yes, flood insurance covers foundation damage, although regular homeowner insurances don’t cover damage from floods at all. These cover some rain damage, but if your house is full of water because of rising bodies of oceans, streams, rivers, or lakes, it won’t cover you. Mostly, insurance from floods can be purchased from the NFIP or the National Flood Insurance Program. This is a regulated federal program that has two kinds of flood protection policies. One covers your private property up to one hundred thousand dollars. The other type of insurance policy covers your actual building property or home up to two hundred and fifty thousand dollars.

You can buy both policies or just one. There are some situations where you may be required to purchase this. For example, if you are taking out a property mortgage in a zone considered high risk such as Special Hazard Flood Areas, your lenders will need you to purchase a flood protection policy as a prerequisite to the loan. You need to ensure that your community participates in the national flood program to buy a policy. Every state is affected by flooding, so you do have eligibility for this.

Coverage of the Federal Flood Insurance Program Includes:

The property policy of each building, according to the NFIP, covers the cost of rebuilding your home or the cost of your home’s actual value, which includes:

  • Debris removal
  • Detached garages up to ten percent of your house policy
  • Window blinds
  • Permanent installed wall-boards, cabinets, bookcases, or paneling
  • Permanently installed carpets over unfinished floors
  • Kitchen appliances including built-in dishwashers, stoves, and refrigerators
  • HVAC equipment like a water heater, furnaces, and air conditioning
  • Plumbing and electrical systems
  • Your house foundation

Coverage of the Federal Flood Insurance Program Includes:

The property policy of each building, according to the NFIP, covers the cost of rebuilding your home or the cost of your home’s actual value, which includes:

  • Debris removal
  • Detached garages up to ten percent of your house policy
  • Window blinds
  • Permanent installed wall-boards, cabinets, bookcases, or paneling
  • Permanently installed carpets over unfinished floors
  • Kitchen appliances including built-in dishwashers, stoves, and refrigerators
  • HVAC equipment like a water heater, furnaces, and air conditioning
  • Plumbing and electrical systems
  • Your house foundation

Collecting Insurance May Have Limitations

If you make more than four flood claims for more than five thousand dollars each, or two claims that cost more than your home if you add them together, you will get an “offer” from the NFIP that gives you the grant to make your home less susceptible to damage by flood. If you don’t take the grant funds and make the necessary improvements, your policy payment will most likely substantially increase.

Severe Damage To Your Home By Floods

You may get thirty thousand dollars from the NFIP to move, tear down, or raise your home. This gets added to any other NFIP payments claimed. The total should still not go above two hundred fifty thousand dollars.

Regular insurance for homeowners doesn’t cover floods. Flooding is considered the cause of damage if there are two land acres surrounded by water. These acres of land need to be dry usually, or that the flood that occurred needs to have damaged more than two properties, with one of the properties belonging to you. The water needs to come from mudflow, which is mud carried by flowing water, creating a mud river in the process.

Water also has to come from the rapid, unusual accumulation of surface runoff waters from any source. Water can again come from tidal waters or overflowing inland waters to qualify. When there is a collapse of seepage and water coming from drain backups or sewer backups or an overflowing sump pump, this is not considered a flood.

You will also be covered when there is a sinking or a collapse of shorefront land to waters above the cyclical anticipated levels.

When it comes to buying federal flood insurance, don’t wait for a storm to come. This is especially true since there is usually a thirty-day waiting period. Make it easier to file a case by making an inventory of your home possessions.

Share with a friend:

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on reddit

Our readers come first

The content on Sproutnomics includes links to our advertising partners. When you read our content and click on one of our partners’ links, and then decide to complete an offer — whether it’s downloading an app, opening an account, or some other action — we may earn a commission from that advertiser, at no extra cost to you.

Our ultimate goal is to educate and inform, not lure you into signing up for certain offers. Compensation from our partners may impact what products we cover and where they appear on the site, but does not have any impact on the objectivity of our reviews or advice.